Is PLUG Stock the Next TSLA Stock?
Plug Power Inc (NASDAQ:PLUG) is one of my favorite renewable energy stocks for 2016. In fact, I think that PLUG stock is well on its way to usurping Tesla Motors Inc’s position as the hottest “green stock” of the year. Eat your heart out Elon Musk.
This little company has exposure to a huge market with much fewer players than the auto industry, yet it’s companies like Tesla that get all the glory. Investors are seduced by flashy narratives, particularly when they include a hero figure of some kind.
And Elon Musk fits that bill. He already had two exits from successful startups (Zip2 and Paypal) before Tesla and SpaceX came to fruition. He is the heir to Steve Jobs’ mantle as the “genius of Silicon Valley,” so it’s only natural that his company gets more press.
But let’s recap a few details. Tesla makes electric cars, meaning it has to surmount entrenched automakers like GM and Ford. Plug Power makes hydrogen fuel cells that have a ton of industry applications. The company is basically an equipment manufacturer.
The thing is that Plug Power makes equipment that’s energy efficient. So the goal is the same as Tesla’s, but with a less volatile customer base.
Don’t get me wrong, I’m incredibly bullish on TSLA as well, but I don’t discriminate based on media popularity. Just because Elon Musk draws a lot of attention to Tesla doesn’t make it a more profitable investment than other renewable stocks out there. Consider the fact that Plug Power just showed a jaw-dropping 78.6% year-over-year revenue increase. (Source: “Plug Power Announces 2015 Fourth Quarter and Year End Results,” Plug Power Inc Investor Relations, March 10, 2016.)
The “GenDrive,” a battery pack for forklifts, is the company’s main product. It sold 1,256 units in the fourth quarter of 2015, up from 537 in the same period last year. I know that’s not as glamorous as having 100,000 Tesla “Model S” vehicles on the road, but it’s a proportionately larger increase than Tesla showed in its last performance.
It also reveals an uptick in smart technology adoption. These GenDrive fuel cells fit into any existing forklift, yet they’re more way more productive. They don’t lose power or speed towards the end of their battery life, they take only two minutes to recharge, and they’re safer and cleaner. It’s a no-brainer. (Source: “GenDrive,” Plug Power Inc web site, last accessed March 10, 2016.)
You can tell that more and more warehouses are making the switch because Plug Power announced it will break even by the end of 2016. So, by the end of this year, PLUG stock could be sky-high, dethroning TSLA stock as the market’s prized “renewable.”